SPEAKERS’ CORNER: Inflight Connectivity – “When can we have it across our entire fleet?” by Ian Dawkins
It is certainly true today that the inflight connectivity market is developing very quickly and we are starting to see the beginnings of what it will look like when it does all settle down. Also clear is the fact that there will come a time when inflight connectivity is provided on most commercial aircraft. The conversations we have with airlines have shifted in the past eighteen months from ‘let’s try inflight connectivity on one aircraft’ to ‘when can we have it across our entire fleet?’ In fact, it is hard to imagine future aircraft being developed without passenger connectivity, in the same way that embedded IFE is currently a standard option for long-haul aircraft. Consequently, OnAir is now available for most aircraft types flying today, from the Airbus A320 family and Boeing 737, to A380s. Further, customers come from all parts of the industry. For example, OnAir has as customers, long-established full-service flag carriers, new airlines from emerging countries, and low-cost carriers, which represent countries worldwide. The point is that connectivity isn’t confined to one area of the industry, or to one region. It is universal!
The crux of the discussion, though, is around how passengers actually want to use the service and pay for it. The first thing we do know is that when both WiFi and a GSM mobile phone network are available, 97% of airline passengers choose to use the mobile phone network. The main reason is that it is very easy to use: simply turn on your phone and use it as you do on the ground; billing is similar to international roaming. As smartphones become more sophisticated and prevalent, and as more content is provided through low data apps and portals, usage is on the increase.
The ever-increasing penetration of smartphones around the world is one of the drivers of inflight connectivity usage. For example, the iPhone is currently the device used most over the OnAir networks.
Passengers around the world enjoy the benefits of inflight connectivity, and in particular, more and more airlines are offering the GSM service to and from the US. For example, Singapore Airlines operates daily connected aircraft from Asia to LAX and JFK, and British Airways operates twice daily between London and JFK. We just need the US authorities to catch up with the rest of the world and allow mobile phones to be used in US airspace. Until recently, the bulk of usage has been people flying for business purposes. Of course, it remains true that business people remain significant users of inflight connectivity, however usage by leisure travelers is increasing. It goes without saying that one of the key reasons is price. There is a direct linear relationship between pricing and usage: a cut in price results in an increase in usage and number of adopters, for instance.
OnAir is working hard with both airlines and mobile network operators around the world to bring down prices. For example, we are currently running a promotion in Brazil, whereby Oi subscribers have a 50% discount when using Mobile OnAir on TAM flights. We will also be running similar promotions in other parts of the world. On the Internet side, airlines are reducing the cost to passengers, or even providing it free of charge, which naturally is driving usage.
We also know what passengers like to use on GSM that supports both voice and data. Nearly half the usage is text messaging and most of the other half is emailing. Only about a tenth of all usage of the OnAir mobile phone network is for voice calls.
The second thing we know is that there is a difference between GSM for Internet and Wi-Fi. Passengers prefer the ease of use with a smartphone; the main reasons are that connectivity is readily available and the payment becomes part of the normal phone bill, just like international roaming.
Finally, we know that passengers want to be assured that the service will be consistent throughout the flight. That is why we have invested heavily in developing our network of around 80 authorizations for national and supranational regulators and over 350 roaming agreements. It is also why we use Inmarsat’s satellite global coverage.
The industry is recognizing that Inmarsat’s Ka – Global Xpress will become the benchmark in the industry. The fact that OnAir is their Distribution Partner means we will be able to provide greater bandwidth in the future. Global Xpress will provide users with either 30% more throughput or 30% more data volume than a Ku-band solution, for the same price. What exactly that bandwidth will be used for is something we can only guess at. So while it is straightforward to predict widespread adoption of connectivity, predicting its future is much harder.
Submitted by Ian Dawkins | Chief Executive Officer – OnAir